Gold Drops as Dollar Rebounds, Equities, Commodities Slump on Debt Woes
Gold declined for the fifth time in six sessions as the dollar’s rebound eroded demand for the metal as an alternative investment, and concerns that the global economy will falter drove equities and raw materials lower.
Most advanced nations are lapsing back into recession, while the U.S. is already in the throes of an economic contraction, said Nouriel Roubini, the chairman of Roubini Global Economics LLC. The greenback rose as much as 0.7 percent today against a basket of currencies, and the Standard & Poor’s 500 Index of equities fell 2.1 percent. The S&P GSCI index of 24 raw materials headed for the biggest quarterly slump since 2008,
“People are trading gold as a commodity today,” Frank Lesh, a trader at FuturePath Trading in Chicago, said in a telephone interview. “The strength in the dollar is not helping matters either.”
Gold futures for December delivery fell $34.40, or 2.1 percent, to settle at $1,618.10 at 1:43 p.m. on the Comex in New York. In trading after the settlement, the metal touched $1,600.50. The price has tumbled 16 percent from a record $1,923.70 on Sept. 6.
Silver futures for December delivery declined $1.402, or 4.4 percent, to $30.134 an ounce in New York.
On Sept. 26, the most-active contract fell as much as 13 percent to a 10-month low of $26.15. Yesterday, the price jumped 5.2 percent.
“We would stay out of the silver market at the moment,” Edel Tully, a London-based analyst at UBS AG, said in a report. “It is the most irrational of metals, and certainly not for the fainthearted.”
On the New York Mercantile Exchange, platinum futures for January delivery slumped $39.30, or 2.5 percent, to $1,538.10 an ounce. Palladium futures for December fell $15.20, or 2.3 percent, to $634.75 an ounce.
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